Analyst Upgrade Highlights European Lithium’s Strategic Greenland Venture

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A substantial increase to its price target and significant advancements at a key Greenland-based rare earths project have placed European Lithium firmly on the radar of investment research firm First Berlin. The firm's latest analysis now bases its valuation almost entirely on this single asset, pointing to considerable upside potential for the company's shares.

In a recent research update, First Berlin Equity Research reaffirmed its 'Buy' recommendation for European Lithium. Analyst Simon Scholes raised the firm's price target dramatically from €0.14 to €0.22 per share, marking an increase of 57 percent. According to First Berlin's calculations, this new target implies a potential upside of approximately 170 percent from the stock's recent trading level.

This bullish reassessment is primarily driven by European Lithium's strategic 45 percent stake in Nasdaq-listed Critical Metals Corp (CRML) and, crucially, CRML's Tanbreez rare earths project in Greenland.

Tanbreez Project Emerges as Core Valuation Driver

First Berlin's analysis identifies the Tanbreez initiative as the central value driver for European Lithium. The current valuation model for the company rests solely on this project's prospects, which is expected to be the focal point of development efforts for EUR/CRML in the medium term.

The research also addresses previous technical concerns regarding the project. Critics had highlighted that leaching the eudialyte ore could produce silica gel, potentially complicating the extraction process. First Berlin counters this by referencing 2019 pilot tests conducted under the EU's EURARE project. In those tests, conducted by Friedrich et al., the successful leaching of 36 kilograms of Tanbreez concentrate was demonstrated at a pilot scale. The analyst views this as evidence against the existence of an insurmountable technical hurdle.

Critical Metals Corp Achieves Key 2025 Milestones

The re-rating follows several important developments achieved by Critical Metals Corp in 2025:

• Signing Letters of Intent (LOIs) for rare earths supply agreements with Ucore and REalloys in the United States.
• Forming a joint venture for downstream processing with Romanian state-owned enterprise Nuclearelectrica; CRML is slated to receive 50 percent of the value generated from refinery and magnet production.
• Securing a Letter of Intent from the U.S. Export-Import Bank regarding potential support for a financing package worth up to $120 million.

First Berlin notes that, collectively, European Lithium and Critical Metals Corp hold more than $205 million in cash. This liquidity position comfortably exceeds the initial investment requirement of $150 million outlined in the Tanbreez preliminary economic assessment (PEA). The capital base was notably strengthened during an October 2025 rally in CRML shares, which occurred amid geopolitical tensions between the U.S. and China concerning rare earths supply.

Recent Corporate Developments

During December, European Lithium announced several operational and capital market steps:

• December 12: Critical Metals Corp confirmed the acquisition of a proof-of-concept pilot plant for 3 million AUD.
• December 9/10: Signing of a Term Sheet for a 50/50 joint venture with Romanian state-owned company FPCU; this JV secures offtake for 50 percent of Tanbreez production, raising the total contracted offtake to 75 percent of future output.
• December 16: Completion of an option offer as per the prospectus dated December 1, 2025.
• December 17: Issuance of 772,076 unlisted options, exercisable until December 31, 2026, at a strike price of 0.08 AUD.

These moves are seen as strengthening both the industrial framework around Tanbreez and the overall financing outlook.

Market Performance and Commodity Backdrop

European Lithium's shares exhibited high volatility in December, trading in a range between 0.145 and 0.235 AUD. Despite recent pullbacks, the stock's performance since the start of the year remains around +280 percent, indicating a significant market re-evaluation throughout 2025.

The broader commodity environment provides additional support. Lithium carbonate futures on the Guangzhou exchange reached an 18-month high of approximately 110,000 yuan per tonne on December 17. This surge was driven by regulatory interventions in China's Jiangxi province, where 27 mining licenses were revoked.

Forward Look: Key Factors to Watch

First Berlin outlines several pivotal factors that will influence European Lithium's near-term trajectory:

• Tanbreez Advancement: Further project development and the execution of the Romanian partnership are considered central catalysts.
• Commodity Prices: Lithium carbonate prices sustaining at or above recent levels of 110,000 yuan per tonne would support long-term economic assumptions.
• Wolfsberg Project: In Austria, the environmental review process continues after a court requested additional assessments in November.
• EU Funding Landscape: The European Commission's "RESourceEU" action plan, adopted on December 3, 2025, pledges up to €3 billion for critical raw materials projects.

European Lithium currently commands a market capitalization of around 274.7 million AUD, with average daily trading volume exceeding 21 million shares. The equity's fortunes remain closely tied to the progress at Tanbreez, lithium price movements, and European raw materials policy.